Healthcare costs in India have increased, making health coverage a necessity for every individual. Among various ways of securing financial protection during medical emergencies, mediclaim and health insurance are the most popular and often used interchangeably. However, there are some differences between the two when it comes to coverage, features, and benefits. In this blog, we will compare Mediclaim and health insurance in detail to help you make an informed choice.
Such a medical crisis not only affects health but also adds a financial burden. It can be managed with the help of Mediclaim and health insurance. While Mediclaim is the most basic health coverage, health insurance is more comprehensive. By understanding the difference between the two, you can be in the best position to choose the plan that goes best with your needs and financial goals.
What is Mediclaim?
Medioclaim is the health policy, wherein a claim is reinstated on reimbursement for any medical emergency-related hospitalization. Pre-specific treatments or procedures are covered. In general, the normal mediclaim policy is very simple, thus reflecting the direct provision of immediate medical expenditure.
Key Features of Mediclaim:
- Hospitalization Coverage: Hospital stay, surgery, and treatment-related costs are covered.
- Predefined Limit: The amount of coverage is limited and pre-decided at the time of taking the policy.
- Claim Process: Charges are either given as a re-imbursement or paid directly with the hospital through the cashless option.
- Less Expensive: Mediclaim plans are in general relatively cheap.
- Not Cumbersomely All-Round Cover: It does not take care of extended pre-hospital and post-hospitalisation expense.
What is Health Insurance?
Health insurance is a broader concept that provides financial protection against various medical expenses. It includes hospitalization costs, as well as pre- and post-hospitalization expenses, daycare procedures, and sometimes even preventive health checkups. Health insurance policies can also offer additional benefits like critical illness coverage and maternity benefits.
Key Features of Health Insurance:
- Comprehensive Coverage: A wide range of medical expenses including pre- and post-hospitalization.
- High Sum Insured: The policies have a higher limit of coverage than Mediclaim.
- Add-On benefits like critical illness riders, maternity benefits, etc.
- Cashless Facility: Ties up with a large network of hospitals for cashless treatment.
- Tax benefits: The payment of premiums will be eligible for deductions u/s 80D of the Income Tax Act.
Mediclaim vs Health Insurance: Key Differences
The table below highlights the primary differences between Mediclaim and health insurance:
| Feature | Mediclaim | Health Insurance |
|---|---|---|
| Scope of Coverage | Limited to hospitalization expenses | Comprehensive, includes pre- and post-hospitalization expenses |
| Sum Insured | Lower, predefined limits | Higher, customizable limits |
| Premium Cost | Lower premiums | Slightly higher due to broader coverage |
| Add-Ons and Riders | Not available | Available (e.g., critical illness cover) |
| Cashless Facility | Available in network hospitals | Available with a larger network of hospitals |
| Coverage for Illnesses | Specific illnesses or treatments | Covers a broader range, including critical illnesses |
| Tax Benefits | Available under Section 80D | Available under Section 80D |
Things to Consider When Choosing Between Mediclaim and Health Insurance
1. Financial Needs:
- Choose Mediclaim if you want basic coverage for hospitalization at a lower premium.
- Opt for health insurance if you want comprehensive protection and can afford higher premiums.
2. Family Structure:
- For single individuals, a Mediclaim policy may suffice.
- For families, health insurance is a better choice as it offers broader coverage, including maternity benefits and daycare procedures.
3. Health Risks:
- If you have a history of critical illnesses, health insurance with add-on riders is advisable.
4. Age:
- Young individuals with fewer health risks can start with Mediclaim.
- Older individuals may need health insurance due to higher healthcare costs.
5. Budget:
- Evaluate your monthly budget to decide on premium affordability.
Tax Benefits for Mediclaim and Health Insurance
Both Mediclaim and health insurance premiums are eligible for tax deductions under Section 80D of the Income Tax Act. The deduction limits are:
- For Individuals: Up to ₵25,000 for premiums paid for self, spouse, and children.
- For Senior Citizens: Up to ₵50,000 if the insured is above 60 years of age.
- Preventive Health Check-Ups: Additional deduction of ₵5,000 within the overall limit.
These tax benefits make both Mediclaim and health insurance financially attractive options.
Conclusion
Mediclaim and health insurance have different purposes in the financial planning for healthcare. Essentially, while Mediclaim provides basic coverage for certain hospitalizations, a health insurance gives more comprehensive and flexible safety net cover. Obviously, your choice should depend on what suits your individual needs, your financial goals, and your family structure.
If you are looking for low premiums and specific coverage, then Mediclaim is the best option. However, if you want a more comprehensive plan that covers unexpected medical expenses and provides additional benefits, then health insurance is the better option. Remember to compare policies, read the fine print, and choose a plan that ensures peace of mind during medical emergencies.
